The likelihood of IAG freezing the Government out in its effort to buy Aer Lingus is increasing, according to a leading financial analyst.
David Holohan, the head of research at stockbroking firm Merrion Capital, told the Irish Independent that the Government may have overplayed its hand, prompting IAG to pursue a more aggressive acquisition strategy.
"The Government have played their cards. The likelihood of this going hostile is increasing," he said.
Such a move could see IAG, which is headed by chief executive Willie Walsh, try to buy all but the 25.1pc stake in Aer Lingus that the Government owns. That would leave the Government as a minority shareholder in Aer Lingus, unable to sell its stake to anyone else and unable to extract any guarantees from IAG.
But other sources have questioned whether IAG would pursue what would certainly be a risky strategy.
It would infuriate the Government and could see wider public opinion shift against IAG.
IAG has insisted from the outset of its offer approach that it wanted the backing of both the Government and Ryanair, which owns 29.8pc of Aer Lingus, to ink a deal to buy Aer Lingus.
Transport Minister Paschal Donohoe said on Tuesday that the €1.4bn offer from IAG isn't sufficient and that the Government needs additional detail. He noted that the offer of €2.55 per Aer Lingus share is acceptable to the airline's board.
Willie Walsh has pledged to create 635 net new jobs at Aer Lingus by 2020 and also to launch new routes to North America from Dublin. He said IAG would also bring an extra 2.5 million passengers to Ireland by 2020.
But the Government wants more information about the level of job creation, potential job losses, and also an extended commitment on the use of Heathrow slots to service routes to Ireland.
IAG has offered a five-year guarantee that it will use Aer Lingus slots at Heathrow to service only Irish routes. The Government said that's not good enough.
Matt Staunton, the national secretary of the biggest trade union at Aer Lingus, Impact, told the Irish Independent that he "still has nothing to go on" in terms of deciding whether a takeover would be in the interests of the airline and staff.
Trade union representatives will also meet new Aer Lingus chief executive Stephen Kavanagh at 8.30am today to discuss the airline's financial results, but also to discuss the IAG offer.
Mr Holohan said he expects that IAG will revert with an effort to accommodate the Government's demands, possibly with a seven-year guarantee on slot use.
Union representatives also met Labour TDs including Joe Costello at lunchtime yesterday as the politicians prepared their motion on Aer Lingus for the Labour Party conference this weekend.
IAG releases its financial results for 2014 tomorrow. Mr Walsh will be pressed by investors on what he intends to do in relation to a bid for Aer Lingus.
Finance Minister Michael Noonan kept the door ajar yesterday for IAG, which also owns British Airways and Iberia and Vueling in Spain.
"A deal certainly isn't off the table and those participating will look at it on commercial grounds, not political grounds," Mr Noonan said.
"We're a minority shareholder. We're 25pc. Ryanair has a big number of shares, Etihad has a lot of shares, the airline pilots association have about 6pc," he told Bloomberg TV.
Gulf airline Etihad owns close to 5pc of Aer Lingus.
"There are a lot of players on this and they have all remained silent with the focus on the Government," said the finance minister.
"We're a 25pc shareholder. We don't control the match. But we believe that Willie Walsh and his people have been very upfront in their discussions with us and the discussions will continue."